Couple Charged in COVID-19 Fraud Scheme

Click Here to Sign Up for SBA OIG Email Updates on Recent Investigative Cases, Audit Oversight Reports, and General News

Click Here to View the Original U.S. Department of Justice (DOJ) Press Release

A couple who purportedly owned two New Jersey businesses were indicted on charges that they fraudulently obtained hundreds of thousands of dollars in federal Paycheck Protection Program (PPP) loans, Senior Counsel Philip Lamparello announced.

Sabrina Mitlo, 41, and Joseph Mitlo, 40, both formerly of Piscataway, New Jersey, are each charged with one count of conspiracy to commit bank fraud. They made their initial appearances on January 20, before U.S. Magistrate Judge James B. Clark, III in Newark federal court and were released on $100,000 unsecured bond.

According to documents filed in this case and statements made in court:

From May 2020 through July 2020, Sabrina and Joseph Mitlo engaged in a scheme to illegally obtain over $715,000 in PPP loans on behalf of businesses located in New Jersey that they purportedly owned but which had no employees or payroll. To do so, the Mitlos submitted fraudulent loan applications falsely representing that their businesses had employees and payroll obligations, which included falsified tax documents purporting to show that the businesses had paid wages in prior years. Once the PPP loans were issued into the business bank accounts, in order to obtain the loan proceeds while keeping the scheme a secret, the Mitlos arranged for a payroll service to issue payroll checks to purported employees of the businesses that did not, in fact, work for the businesses. Once the Mitlos obtained those payroll checks, Sabrina Mitlo personally cashed them at a check cashing facility and kept the proceeds.

The count of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a maximum fine of $1 million, or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest.

Senior Counsel Lamparello credited with the investigation special agents of the FBI's Newark Field Office, under the direction of Special Agent in Charge Stefanie Roddy; and special agents and attorneys of the Small Business Administration, Office of Inspector General, under the direction of Special Agent in Charge Amaleka McCall-Brathwaite, Eastern Regional Office in New York.

The government is represented by Assistant U.S. Attorney Robert L. Toll of the U.S. Attorney's Office's Health Care Fraud & Opioids Enforcement Unit in Newark.

The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice's National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

###

mitlo.indictment.pdf